Business Context and Reporting Period
This Form 6-K filing by Gold Fields Limited covers the month of June 2009, specifically providing an operational update and revised guidance for the fourth quarter of the 2009 financial year (Q4 F2009). Gold Fields is a major unhedged gold producer with operations in South Africa, Peru, Ghana, and Australia.
Key Financial and Operational Metrics
- Production Guidance: Attributable production for Q4 F2009 is expected to be approximately 905,000 ounces (koz), representing a 4% increase.
- Cost Guidance: Total cash cost is expected to be approximately US$525/oz, and Notional Cash Expenditure (NCE) is expected to be approximately US$750/oz.
- Regional Breakdown (Q4 F2009 Expected):
- South Africa: ~520koz (2% increase vs. Q3), comprising Driefontein (212koz), Kloof (160koz), South Deep (52koz), and Beatrix (103koz).
- International: ~377koz (6% increase vs. Q3), comprising Tarkwa (165koz), Damang (53koz), St Ives (109koz), Agnew (45koz), and Cerro Corona (84koz gold equivalent).
- Safety Metrics: Fatal injuries for F2009 are projected to decline by approximately 57% to 20, down from 47 in F2008. No fatalities were reported at international mines.
Material Changes and Operational Performance
The filing indicates that Q4 F2009 production guidance is being revised upward to beat previous guidance issued on May 7, 2009. While production is increasing, total cash costs and NCE are expected to be slightly higher than previously guided. Management attributes this cost increase solely to converting costs at a much stronger rand/US dollar exchange rate.
Operational variances include:
- South Africa: Driefontein and Kloof faced production interruptions due to increased seismicity and safety-related stoppages. Conversely, South Deep and Beatrix showed improved performance, with Beatrix recovering from mining quality issues.
- International: Cerro Corona and Agnew outperformed expectations. Tarkwa was marginally below guidance due to power interruptions from national grid maintenance, though the build-up remains on plan.
Guidance, Outlook, and Management Commentary
CEO Nick Holland highlighted greater consistency and predictability in operations. The company expects to maintain an upward production trend for the third consecutive quarter, surpassing the Q1 F2009 low point of 798koz by more than 100koz (13%).
Future Outlook: Gold Fields remains committed to building production to a goal of 950koz to 1 million ounces per quarter over the next 12 months. Key drivers for this growth include:
- Continued safety improvements at South African operations.
- Tarkwa achieving full production.
- Beatrix continuing its recovery.
- Kloof improving flexibility.
- South Deep building toward a target of approximately 300koz for F2010.
Detailed financial results for Q4 F2009 are scheduled for publication on August 6, 2009.
Investor Verification Checklist
- Verify the actual Q4 F2009 production figures against the 905koz guidance when results are released on August 6, 2009.
- Monitor the impact of the rand/US dollar exchange rate on the final reported cash costs and NCE.
- Track the progress of seismicity management and safety protocols at Driefontein and Kloof to ensure sustained production.
- Confirm the timeline for Tarkwa reaching full production capacity.
- Review the detailed financial statement for the actual fatal injury count and other safety metrics for F2009.